Instructions: This assignment must be done in APA format. A minimum word count of 300 words (not including references) is required. A minimum of 3 references (with in-text citations) is required. Please make sure that scholarly references are used. If you have any questions please feel free to ask. Question Select a country to use for comparison of their healthcare policies and system to the United States. Focus on policy first then operations. Select a policy from each nation having a common goal. e.g access to healthcare, quality of care, Compare these two policies. What are the benefits of each? What are the downsides of each. What unintended consequences come from the implementation of each? What policies or implementation practices could the US adopt from another country. Do not jump to "universal care". To understand why research key words like universal healthcare in the US, why universal care won't work in the US, cultural factors prohibit copying another nation etc. Can countries with diverse often conflicting cultures really be compared as to success? Why or why not? Sample link: https://www.youtube.com/watch?v=cE7fG_0sMt0 Malcolm Gladwell on Canadian universal care vs US Book Reference: Morone, J. A., Litman, T. J., & Robins, L. S. (2009). Health politics and policy(4th ed.). Clifton Park, NY: Cengage Learning. Additional Readings: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.27.3.759 https://www.healthaffairs.org/doi/full/10.1377/hlthaff.28.4.1136 Instructors Notes: • • In professional writing avoid using first person "I" and third person "we", as they detract from the quality and turn professional researched statements into opinions. Instead of "I" use, for example, use "the writer, the author or the researcher". Approved sources for this course include the course textbook and scholarly articles from the Bethel library databases. No other source information is acceptable. Chapter 23 American Health Care in International Perspective Joseph White H I G G S , This chapter places American health care politics and policy in an international perspective—highlighting how our own system is unusual. The S chapter describes the “international standard” for organizing and financH ing care by showing what most other health systems have in common. The international perspective illuminates A the underlying causes of our N problems (like high costs); it highlights the kind of health policies that I to fail. often succeed—and those that are more likely C Q Artists know that the appearance of a figure depends Uin part on the painting’s background, or setting. Within this book’s analysis of American health policies, the purpose of thisAchapter is to provide some background, or contrast, that can highlight important aspects of the subject. 1 The proper background for this picture consists of other “rich democracies”: countries that have large enough1per capita incomes and responsive enough political arrangements 0 so that underlying economics and sociology enable similar poli5 cies, if the political systems so choose.1 While I will fill in some details later in this chapter,Tthe basic outline of the international backdrop to American S medical care is clear enough. Other countries have national health care or insurance systems that provide much more equitable access at lower cost than in the United States. Hence the international background highlights how differently the United States collects the money for health care (finance) and pays the providers of care (payment). To a lesser extent, the background provides some contrasts to how Americans organize care (delivery). Last, the background highlights aspects of US health politics. These international comparisons were evident to some of the supporters of the 2010 health care reform legislation, and one way to understand that legislation is by looking at to what extent it would, if implemented, make the American health care system like those in other countries. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 23 • American Health Care in International Perspective What Can We Learn From Comparison? From a social scientific perspective, comparing countries is a way to increase the number of cases for analysis. Just as we can learn more about welfare-to-work policies by looking at actions and results in 50 states than in one, we can learn more about health policies by adding to American experience the experience of the countries at comparable levels of economic development.2 We need to be careful because nations may vary from each other in ways that states do not. YetHthat should not scare us away. After all, Texas is very different from I Massachusetts. G International comparisons offer three kinds of information: about possibilities, about cause-and-effect relationships, and G about preferences. Possibilities S , The more cases we look at, the more phenomena we might see, so the more alternatives we might consider for changing our own system. For example, national health coverage S can be achieved in very different ways. Canada has governH ment-sponsored insurance, but it is managed by the provinces within broad national guidelines. France has a dominant Anational insurer that covers most people but a series of smaller N of funds for other occupational groups. Japan has thousands insurers, with membership determined by employmentI and location. In the Netherlands, people are required to have inC surance but can choose among funds. In Germany, about 80% of the population is required to join “sickness funds,” Q but there too people choose their funds. In England, instead U of having insurance, citizens are given the right to use a state bureaucracy, the National Health Service. Sweden alsoA provides coverage through health services, but they are organized and mainly funded at the county level. Australia has a version of Medicare nationwide for ambulatory care, but hospital1care is provided by state public hospitals. National Health Insur1 ance (NHI) turns out to include a very wide range of possible 0 arrangements.3 5 in Looking abroad can expand our sense of possibilities other health policy areas as well. In 1990, for example,Tone could see that in the United States care within hospitals was basically supervised by admitting physicians, who S practiced outside of the hospital as well. The full-time hospital staff consisted mostly of trainees, interns, and residents. In 367 Germany, physicians with ambulatory care practices generally did not have hospital privileges: Once a patient was admitted, their care was and is managed by full-time, fully trained, hospital physicians. Each system has its own strengths and weaknesses, but, since that time, the US system has moved toward greater use of full-time “hospitalist” physicians.4 There are many different ways to pay hospitals; in recent years, policymakers in other countries have to some extent adapted the American Medicare method of payment by diagnosis, but in a variety of forms and for a variety of purposes. Britain’s creation of a National Institute for Health and Clinical Excellence (NICE) has inspired all sorts of proposals in other countries. Thus looking at other countries can increase the menu of possible “solutions” to policy problems. Yet studying other countries should also, sometimes, provide caution against believing problems could be easily solved. If an undesirable condition has never been solved in other countries, maybe American failures are not due to American institutions. As my mentor, Aaron Wildavsky, commented to me in 1993, “Even Stalin and Beria couldn’t get doctors to move to the countryside.” In 2011 it was impossible to find countries that had found ways to “pay for performance.” Comparison might give us a more realistic sense of what is possible, not just a wider range of options to consider. Cause and Effect Analysis of how systems work in other countries can also provide evidence about cause-and-effect relationships. For example, observation of the same relationship in multiple settings may make it more credible. American evidence suggests that an aging population per se is not nearly the most important cause of increases in health care spending. The fact that evidence from other countries supports exactly the same conclusion should make this finding more convincing.5 Yet it is more difficult to use comparison to analyze causation than to survey possibilities, for a series of reasons. To begin, it can be very hard to measure some effects. The controversies over assessing any new technology or drug make that clear enough, as do the controversies over rating the performance of individual hospitals or health plans. The problem is particularly severe if the goal is to compare the quality of national health care systems.6 Measurement of the dependent variable is less of a problem if the variable is health care costs or the extent of insurance coverage. There can be some disagreement about what costs count or what benefits matter, 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 368 PART VII • The United States in International Context but there is very little doubt that costs are much higher, and a larger part of the population has no coverage, in the United States than in other countries. Even when outputs can be measured and causes identified, doubts can be raised about the implication of that finding for American policy choices. For example, there is no doubt that when Canada moved to a system of NHI with stronger capacity and payment regulations, the trend of spending increases, which had been quite similar to the United States until then, substantially diminished. Yet critics could argue the association between seeming cause and effect is H spurious because the better performance is due to some other, unmeaI not be sured cause. Lower health care costs in Canada could due to superior cost-control methods but due to Canadians G being healthier because of lower levels of poverty, crime, and G other problems. Or perhaps changing the policy (cause) will have negative effects on some other valued output. Hence S the policies that lower Canadian costs may be claimed to have , unacceptable effects on quality. Also, perhaps intervening factors mean a policy would work differently in the United States than in Canada. A friend of mine, for example, suggests S that the payment restrictions that work in Canada will not work H law as well in the United States because Canadians are more abiding and Americans more likely to look for waysA to cheat the system. None of these objections are in fact compelling, N benbut an analyst who argues that the United States would efit from adopting Canadian-style insurance has to be I able to address them all. C Preferences Q Each nation has not only health care policies but health care U fight politics as well. Within that politics, groups define and for their interests. Analysts identify “problems.” To most A people, each of these processes may seem natural, but for political scientists they require explanation. 1 as Why are some conditions put onto the political agenda 7 problems and others not? For example, how did “quality” 1 become an issue in the United States in the late 1990s?8 0 Why do some groups take stands that would seem contrary to their economic interests? For example, why5 do businesses that pay lots of money for health insurance not Tturn to the government, which seems to have more power to control S costs, and ask it to take over? Do we decide which problems are most pressing based on some objective measurement of their level? Or do problems get prioritized based on the self-interested perspectives of groups that try to sell those definitions to win changes that serve their own purposes? Here an instance would be the frequent claim in the United States that there should be a greater emphasis on “primary care” and less on “specialty care.”9 Is this claim clearly justifiable from data? Or is it predominantly a result of the social position of its advocates? Comparison to other countries can give us a sense of the answers to such questions. For example, if we find people with the same backgrounds promoting the same problem definitions in different countries, in spite of quite different circumstances, we may conclude that the preferences of these groups (say, public-health professionals or physicians) are determined by socioeconomic aspects of health care. If a group in one country takes different positions than similar groups in other countries (such as American businessmen on the subject of compulsory health insurance), we might look for specific causes in that country. In the rest of this chapter, I will identify some conclusions about possibilities, cause and effect, and preferences that I have drawn from my comparative studies of health policy. POSSIBILITIES The most obvious possibility, as mentioned previously, is to provide a health insurance and health care system to all citizens. The fact that all other rich democracies do it strongly suggests it is possible! The second and equally obvious background fact is that other countries spend much less money on health care than the United States does. Figure 23-1 reports that in 2008, the United States spent 16% of its gross domestic product (GDP) on health care. The second highest spender as a share of its economy was France, at 11.2%; most countries clustered in a range from 9 to 11%. Thus, the United States spent at least a 40% larger share of its economy than other countries. The first column in the table provides another comparison: spending in terms of purchasing power (national currency adjusted for national prices). By this standard, the United States spent half again more ($7,538) than the next most expensive country, Norway ($5,003). If we look behind the statistics, we can see nearly as stark differences in policies between the United States and other rich democracies. Although their policies differ in many ways, they share aspects that can be called an international standard. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 23 • American Health Care in International Perspective 369 16 14 12 10 8 4 H I 0 Australia United Canada G Israel Germany France United Kingdom States G 2008 1998 S Figure 23-1 Health Care Spending as Share of GDP, 1998 and 2008 , Note: Based on OECD 2010, countries with national per capita incomes over $25,000 per year in 2009. 2 © Cengage Learning®. All Rights Reserved. 6 GDP is a standard measure of the size of an economy. The ratio of health spending to GDP depends not just on the trend in health spending but on the trend of GDP. Thus, some of the changes over time in this data are partly due to different levels of economic growth, with slow increases in the ratio tending to occur in countries with high growth rates. S H All other rich democracies provide virtually universal A coverage—about 99% or more of the legal population. But N they do not provide complete equity of access, nor do they all I cover the same set of services. Governments create universal coverage by compelling people C to contribute to the system. Germany is the exception: About Q 20% of the population, those with higher incomes or particular jobs, are not compelled to participate in the sickness fundUsystem. But some of those people (such as civil servants) have other A automatic coverage; all have high enough incomes to afford in- portion of more privileged people can buy extra access or better amenities. surance; and all are given strong financial incentives to buy it. The difference between the United States and other countries therefore is not the existence of inequality per se. The difference is that in other countries everyone is guaranteed decent standard coverage, and some have more. In the United States, hardly anyone under age 65 is guaranteed anything; most people have decent coverage, but a large segment has much less. In other countries, there are “escape valves” for the well-to-do. In the United States, there is a ragged “safety net” for the poor. Each country covers its own definition of all “medically 1 necessary” hospital and physician services. Each provides 1 pharmaceutical benefits for the poor and elderly, and some make that coverage universal. In all cases, the definition 0 of medically necessary excludes extras such as cosmetic sur5 gery and private rooms, which are more available to people with more resources. There are other inequalities, partlyTdue to factors such as geography and patients’ knowledge. S Rural areas can never have the same access to services as urban areas, and immigrants who do not speak the national language will always be at some disadvantage. In all systems, some With limited exceptions (Switzerland, Holland to some extent, and Germany for some people), the main coverage in other countries is not a good that people purchase on a market. Instead, people contribute to a system. Whether people pay a payroll contribution (a proportion of wages, like Social Security) or spending is financed from government general revenues, payments are in rough proportion to ability to pay. They are not related to need for care. The basic principle is that contributions should be a fairly steady share of income through your life, regardless of how much health care you or those on whose behalf you contribute need. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 370 PART VII • The United States in International Context In the United States, private insurers charge according to the perceived risks of individuals or groups, so they charge more to those who need more, regardless of their income. Insurance companies and purchasers, which normally means employers, negotiate over the terms of insurance, so that coverage differs according to the price that the purchaser feels able to pay. Therefore, there are thousands of different combinations of benefit terms and provider networks. In most other countries, coverage is much more standard, even if (as in the Netherlands) insurers can compete for customers. Variation occurs mainly due to markets for additional gap or parallel H insurance.10 As mentioned earlier in the chapter, compulsory Icoverage can be organized and financed in many ways. Inequalities G based on the financing system (rather than on, say, geograG phy or social connections) then can take a variety of forms. In England, a person might “jump the queue” with private S care financed by private, parallel insurance. In France, some people , have a wider choice of physicians because they pay extra for “Sector 2” doctors. In Germany, people with private insurance may have quicker or at least more personal service. InS Canada, some people have better gap insurance (e.g., for pharmaceutical or dental benefits) than other people. Yet the basicHguarantee in all these cases remains solid and relatively equitable, A at least, compared to the United States. N Managers of insurance companies or hospitals in other I scope countries may have entrepreneurial instincts, but the for entrepreneurship is limited. Other countries’ experiences C show that universal insurance can include private insurers. Their experience suggests it is not possible, if youQ want to cover everybody, to allow insurers to pursue profitU without being very heavily regulated as to their rates and marketing A in practices. At least, that possibility has not been observed practice. Cost control also is different in other countries. While 1 most hospitals and physicians in the United States collect revenues 1 counfrom many payers on many different terms, in all other tries the terms and sources of income are more limited. 0 They have versions of all-payer systems: Even if there are multiple 5 the payers, the terms of payment from each payer are much 11 same. There are also limits on capital investment,Tso providers of care cannot just go out and buy new equipment or expand their facilities in ways that increase costs.SFor example, access to capital is restricted, or services cannot be reimbursed unless the new capacity was formally approved. Conversely, cost control in other countries generally does not rely on each payer trying to negotiate better prices by threatening to take its business to other providers. In short, other countries rely much more on coordinated payment and much less on selective contracting.12 Hence they illustrate a very different approach from the cost-control methods of the American private market. American advocates may argue that some benefit or other is absolutely crucial to the decency of any universal system. This is, ultimately, a personal judgment. But by looking at other countries, one can see that there are many possible benefit structures. Canada does not directly guarantee pharmaceutical benefits to all. Germany and Japan, in contrast, do. France does, adds substantial cost sharing, and then reduces the effect of cost sharing with low prices and a series of exclusions. Some countries cover abortion and some do not. In Japan, normal pregnancy is not covered by sickness insurance because it is not considered an illness (it is financed by other arrangements). The international standard includes compulsory contributions related much more to income than to projected expenses, coverage of medically necessary physician expenses, cost controls based on some coordination of payers that maximizes their power vis-à-vis providers, and much greater limitations on entrepreneurship by either insurers or providers than in the United States. Within this common pattern of financing, there is variation between having health services and insurance, in the coverage of benefits beyond hospital and physician services, in the levels of cost sharing, in the pattern of additional coverage (strongly related to cost sharing and missing benefits), and in the details of the cost controls. There is no international standard for delivery systems. Experience in other countries is less useful for discovering new alternatives because the United States has such a wide range of systems internally. The role of general practitioners (GP) as gatekeepers in the British NHS or in the Netherlands is mirrored in some American health maintenance organizations (HMOs). Similarly, some American HMOs resemble some British and other country primary care practices in heavy reliance on “physician extenders” of various sorts. The United States has begun to see the use of hospitalists in a way similar to that found in Germany. Other countries do, however, show different mixes of specialists and generalists (basically, fewer specialists). There are especially interesting variations in the balance between physicians and other providers of medical care. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 23 • American Health Care in International Perspective The Netherlands and New Zealand reveal extensive roles for midwives. The French have separated almost all medical testing from physician offices, a system that might have advantages by reducing incentives to “overprescribe.”13 The French have a special medical service to provide house calls at higher, but affordable, fees. In some cases, other countries may seem to be “behind” the United States, with delivery systems that resemble the US past more than the present. French physician offices and hospitals have fewer layers between the patient and the doctor than in the United States.14 Health policies in other countries can provide ideas for H readers about what goals are reasonable (insuring virtually everyI body is; total equality is not). They also can expand notions of the possible solutions to problems. In judging possibilities, G however, people are likely to look for evidence of causes and G effects. That will always be more controversial. CAUSES AND EFFECTS S , Assessments of cause and effect are difficult for all the reasons stated earlier. Yet I have already slipped in some judgS ments as statements about what seems not to be possible. For example, the fact that no system has ever achieved univerH sal coverage without compulsion suggests that compulsion is A a necessary cause for universal coverage. For an analyst, some of the most interesting evidenceN from a country other than one’s own may involve unusual policies. I Such extreme cases may raise doubt about common theories C of cause and effect. For example, Japanese experience shows that regulation of fees can be used to manage medicalQ care systems quite thoroughly. Campbell and Ikegami recount U how high fees were used to encourage adoption of imaging technology and then, when the Japanese imaging industry A had been developed and costs for the health care system seemed too high, fees were lowered.15 This Japanese policy flexibility depended on some unique political conditions, 1but it still should give pause to economists and health services 1 researchers who believe price regulation is a blunt instrument. Analysts in other countries could also learn a great deal0 from looking at American experience, which provides unmatched 5 evidence of how market forces, given free rein, work in health T care.16 As background for understanding American health policy S conundrums, the following statements of cause and effect seem particularly relevant. I will put them in order from what 371 should be least controversial to most—though all are, in my judgment, reasonable conclusions. First, it does not appear possible to have universal health insurance without both making health insurance compulsory for the lower-income two-thirds or more of the population and making payments proportional to income. Second, aging per se does not appear to be nearly as important a cause of increased health care costs as are policies about payment for care. Payment here includes both what is paid for and how payment is made.17 Cross-national evidence helps to make this clear. There is hardly any correlation between the age distribution in countries and their levels of health care spending, and a wide range of evidence shows that aging per se is not a key driver of much anywhere.18 Third, the major explanation of America’s high spending is the prices we pay for services. Comparisons to other countries show that prices are much higher in the United States and that differences in the volume of services are much smaller than the differences in prices.19 Nor are high American costs explained by the availability of fancy technology. When regression lines are calculated to relate availability of cardiac care facilities, cardiac catheterization labs, radiotherapy machines, and other equipment to per capita health care costs, the United States is a consistent outlier, with far higher costs than the supply of facilities would project.20 This is an important finding since so much of American policy debate claims that cost control requires restricting utilization, even to the point of making ethically tough choices.21 Many American health-policy experts either do not know or choose for political reasons to ignore the fact that prices are a major cause of high costs.22 From an international perspective, the key question is why American prices are so high and how to reduce them. That directs attention to factors such as the costs of the administrative overhead associated with the insurance system, pay levels for caregivers and for the business side of the health care enterprise, and more subtle aspects of system organization. Fourth, the degree of inequality created by cost sharing depends on the price of care. Many analysts believe that cost sharing can create an unacceptable two-tiered system, in which richer people go to the “better” doctors who can charge extra for their services, while poorer people are stuck with lower-quality providers. Indeed, sick people may go without care because, even though they have insurance, they 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 372 PART VII • The United States in International Context cannot pay the co-payment or coinsurance. This is a serious concern, but it needs to be modified. Whether 10 or 20 or 35% cost sharing is a major barrier depends on what it is a percentage of. It is less of a barrier at the prices in Australia or France or Japan than in the United States.23 Fifth, it appears that coordinated payment (fees set by government or a cartel of payers negotiating with all providers) normally results in better cost control than does selective contracting (letting many different payers negotiate with different groups of providers). This is harder to judge because other countries use selective contracting so sparingly. H Moreover, there could be times—the mid-1990s in the United I States are the example—during which selective contracting controls prices as well as most coordinated payment G systems. Nevertheless, that example was both quite exceptional and G quite short.24 Moreover, in systems where insurers are encouraged to selectively contract to pay less than the standard S fees, hardly anything of the sort has occurred.25 American costs are , higher than those in countries with coordinated payment by a nearly ridiculous margin. This difference supports what would be expected from the logic of market power (as pursued S by all monopolists): that coordinated payment, if seriously pursued, H is a more reliable cost-control method. The conclusions here reflect my basic earlier point Athat it is easier to judge cause and effect when the effect—in these N cases, level of insurance or spending—is easier to measure. I judgNevertheless, it seems fair to make one last background ment, on a less easily measured topic: The much higher C costs in the United States do not appear to be justified by higher Q quality of care. The United States probably buys some extra amenities for its patients, such as more privacy in hospital rooms and nicer hospital lobbies. It does not buy better overall health results. Table 23-1 provides the most basic statistic: life expectancy. The United States has the lowest life expectancy at birth among the 23 countries. This figure partially reflects the higher infant mortality levels in the United States, which are more closely related to social ills than to quality of medical care (save for the uninsured!). We can control for infant mortality and some other social ills (such as homicide against black males) by looking at life expectancy at older ages. Yet even at age 65, the figures in Table 23-1 are not much better.26 An alternative way to look at overall performance is to study deaths from “causes that should not occur in the presence of timely and effective health care.” Some examples include diabetes, bacterial infections, and treatable cancers. This eliminates causes such as automobile accidents and homicides. A leading study looked at such deaths before age 75 or, for certain conditions, earlier ages. Across 19 countries, the conditions studied accounted for 23% of deaths of males under age 75 and 32% of deaths of females. During 2002–2003, the United States had the highest level of deaths from conditions that could be successfully treated.27 This is also not a perfect measure, but it is hardly compatible with the idea that the United States buys high quality for its money. There is some reason to believe the US level of spending buys, for people with good insurance, some higher quality of life. Americans are getting something for their money in cases where patients would wait longer for elective surgery U A Table 23-1 Life Expectancy at Birth and Age 65, 2008 Estimates Country At Birth—Males Australia Ireland Switzerland Japan Germany Spain United States 79.2 77.5 79.8 79.3 77.6 78 75.3 At Birth—Females 1 83.7 1 82.3 0 84.6 5 86.1 T 82.7 84.3 S 80.3 At Age 65—Males At Age 65—Females 18.6 17.2 18.9 18.6 17.6 18 17.1 21.6 20.4 22.3 23.6 20.7 21.9 19.8 Source: U.S. Census Bureau, Statistical Abstract of the United States: 2012. Retrieved from http://www.census.gov/compendia/ statab/2012/tables/12s1340.pdf. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 23 • American Health Care in International Perspective in some other countries (e.g., for hip replacements) or where less surgery is done and the lower level may result in greater discomfort. Yet many countries do not have noticeable waiting list problems. Moreover, “the amount of US health spending accounted for by the fifteen procedures that amount for most of the waiting lists in Australia, Canada, and the United Kingdom,” three countries where waiting lists are an issue, would be only 3% of total US health care costs. 28 Hence it is highly unlikely that the much higher American spending is justified by convenience of access to surgery. The best one can say for the US health care system, H in terms of value, is that Americans might buy a small amount of extra value for a portion of the population, for a Ihuge amount of extra money—meanwhile providing worse G value to the uninsured. Anyone who says the United States has G the “best health care system in the world” has not looked at the rest of the world. S , PREFERENCES, OR THE PECULIAR POLITICS OFS HEALTH CARE H Health care is a political world unto itself. It shares with some policies, such as pensions, controversies about who willApay for whom. It shares with other policies, such as administraN tion of the law, a need to rely on professionals (such as atI It torneys, accountants, or physicians) to implement policies. is nearly unique in the range of professions and perspectives C it involves: not just physicians but other caregiver types, plus Q the managers of a wide range of institutions, plus the publichealth side of health policy, plus all the institutionalized U commentators such as economists and health service researchers. A The combination of redistribution, professionals, and overall complexity makes health care a peculiar subsystem in any country’s politics and sociology. The fact that it is largely 1 paid for with public or publicly mandated funds, and that it 1 is extremely expensive, makes it a prominent part of political conflict everywhere, with a close connection to the realms 0 of budgetary and economic policy. 5 A comparative perspective provides insight on what aspects T of health politics are due to common factors in the sociology and economics of medical care. In many situations, Sthe saying goes, “where you stand depends on where you sit.” This is often true because people in different jobs have different material interests and because different jobs are roles with 373 processes of socialization that shape individuals’ ideals about policy. It is hard to develop statistical data about such questions, so I can write mainly from anecdotal observation (mine and others’). We can begin with a simple example. In a number of different countries, I have heard orthopedic surgeons described as very different from pediatricians. The former are described as jocks, super confident, super aggressive, and not very cooperative. The latter are supposedly much more cooperative, communicative, and gentle. These are stereotypes and do not predict any individual’s behavior. Yet they are common enough that one cannot help figuring that some self-selection and some of the basic nature of the work shape the personalities involved.29 The medical world has villages and tribes and maybe rival nations. Consider cost-control politics and policy. Any system has cost controllers. To the budget office, or the corporate VP for human resources, spending on health care is a cost to be limited. It is usually growing quickly and always a large cost. Therefore, control of health care spending is a big issue almost without regard to nations’ relative success at the task. When they search for policy options, both cost controllers and other participants in the system tend to think the same way, and come up with the same ideas, across nations. In virtually all countries, budgeters think something like this: “We have to control spending; we should focus on the largest parts of spending; the largest portion is on hospitals; so we should try to get people out of hospitals, which are expensive places.” In addition, new technology has made it easier to do procedures without an inpatient stay. For both these reasons, levels of hospitalization have declined virtually everywhere. Unfortunately, as Uwe Reinhardt has shown, this policy may not reduce costs.30 Yet it is so entrenched in the worldviews of budgeters and managers that we can expect it to remain a common policy regardless of its merits. In a similar fashion, economists are trained to assume that efficiency is created by either markets (most of them) or planning (a dwindling remnant), so they seek cost control from creating markets or plans. Public-health professionals believe health can be improved by nonmedical means; they conclude that healthier people would have fewer expenses, so the solution is to have more public-health interventions. Health service researchers believe many people receive the wrong treatments; some of those treatments therefore must be unnecessary and money could be saved by not doing them; 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 374 PART VII • The United States in International Context therefore, the solution is to do more health services research and ensure doctors follow the research.31 Because of such disciplinary biases, the menu of cost-control ideas is pretty similar around the world.32 There are also fairly standard worldviews and conflicts among the providers of medical care. Nurses and physicians have versions of the same conflicts—over status, control of the hospital, pay, and so on—virtually everywhere. Physicians’ attitudes about practice can be shaped by the conditions of practice and attributes of national culture. In Great Britain, the constraints on supply may have been so severe H for so long, and the national emphasis on keeping a stiff upper I phylip provide a convenient enough justification, that British sicians could rationalize less-aggressive practice more G easily than their counterparts in the United States.33 Nevertheless, G the profession as a whole tends to share a set of values and desires across countries. Giorgio Freddi gives a nice summary: S 1. The remuneration of physicians according to,the feefor-service formula, whereby fees are paid directly by patients to doctors and are freely determined by the latter. S 2. The right to independent practice, that is clinical autonomy, connoted by the sanctity of a highly individualizedHdoctor– patient relationship, which ensures that diagnostic A and therapeutic decisions are subject to no external controls. N 3. The responsibility to lead and coordinate other health I professionals. 4. The processing of professional issues according C to a social consensus model of behavior that excludes the Q conflict-based processes inherent in unionization. Recognizing that a behavior is common in many U different countries should inform us that it has very deep roots. A Inasmuch as such attitudes derive from the fundamental training and work orientation of physicians, they should be very difficult to change. In essence, multiplying the cases can 1give us more confidence in conclusions—when the cases display the 1 same patterns. Thus one can feel fairly confident that paying physicians more money per service will induce them 0 to do more screening tests, while physicians anywhere, not just in 5 the United States, will resist health care reforms that call for 34 At the them to move into large, “integrated” group practices.T same time, we should be aware that change in physician S attitudes is likely to require profound social trends, such as the feminization of professions and the pressure for more predictable working hours to balance work and family obligations. None of this makes all countries’ health politics the same— far from it. Attitudes depend in part on what people think they can get: German physicians surely would like the incomes earned by their US counterparts, but years of income suppression have forced them to have more modest ambitions. Participants in systems become accustomed to how they are organized. Politics is path dependent: Past decisions profoundly shape future possibilities. Moreover, the politics of health depends not only on what is unique to health but also on broader political factors, such as the institutions for political decision making and the cleavages in the national party system. Comparison of the political backgrounds thus highlights significant and relatively unique obstacles to the creation of some sort of national health care or insurance system in the United States. The private health insurance industry became much larger in the United States than in other countries and thus has much more political power. Comparing countries shows that the conservative party in the United States is much more opposed to measures of any sort that socialize risk than the conservative parties in much of Europe have been.35 The United States up to 2009 had also seen much more mobilization of interest groups to oppose redistribution (especially the small business lobbies against President Clinton’s health care reform), and in 2009, even more than before, costs in the United States had become so high that the redistribution to cover our uninsured had to be much larger than the redistribution in countries where income is more equal (most) and health care costs a lot less (all). Hence similarities in the sociology of the health care arena are better predictors of the politics of noninsurance issues. Controversies over how to improve quality, or the balance of medical professions, or methods of cost control, or relative emphasis on prevention and cure, create similar cleavages across nations. “Experts” such as economists and health services researchers have predictable interests and biases. THE 2010 REFORM IN COMPARATIVE PERSPECTIVE The international backdrop is one reason why reformers have argued, for many years, that the United States should be able to offer benefits to all citizens and improve control of costs. It seems reasonable to view the reforms enacted in March of 2010 within the same frame.36 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 23 • American Health Care in International Perspective Policies One obvious difference is that the reforms are not expected to cover all Americans. Yet they are projected to expand coverage by about 29 million people. We might ask, then, whether international comparison can help us understand both the projected success and insufficiency of the legislation.37 Let us begin with the money: the level of effort to subsidize or redistribute funds. About two-thirds of Americans would be eligible for direct government subsidies, either through Medicare or because their incomes are below 400% H of the federal poverty level (FPL) so they could receive insur38 ance through either Medicaid or the new exchanges. This I is comparable to the proportion of the population in the Dutch G sickness fund system in the 1990s. The transfers involved are Gthe also quite redistributive. Medicaid pays nearly all costs for poor. The subsidies in the exchanges would reduce premiums S to a percentage of income, and to lower percentages for lower , as incomes, so they are at least as redistributive downward the norm in other systems. The amount of social sharing is also in line with internaS tional norms. The United States in 2008 already exceeded the H Organization for Economic Cooperation and Development (OECD) average share of GDP devoted to public or quasiA public (e.g., sickness fund) spending on health care. Public spending in absolute terms per capita was lower onlyN than Norway’s.39 Those figures can only rise as a result of the I reform. Thus the system of health care finance created by the C to reform does not look especially ungenerous compared other countries. If it is relatively inadequate, that is because Q the costs of health care are much higher in the United States, U so the same funding effort is less sufficient. The structure of the coverage created by the reform isA very different from a model like Canada’s. Yet it can be described as, roughly, Japanese pooling with choice among plans within 1 each pool, and the Germans, Dutch, and Swiss all offer sub1 stantial choice of plans. In Japan, large employers offer insurance directly to0their employees, taking the illness risk on their own books. This 5 insurance has somewhat better benefits than the national norm and quite limited government subsidies. This is essenT tially the same as for large employer-sponsored insurance in S the United States, although for a more limited share of Japanese coverage. Japanese “government-managed insurance” pools private employees across employers, somewhat like 375 in the US exchanges, with larger government subsidies than for large employers, also like the exchange coverage; recently management of this system was devolved to the prefectural level, much as exchanges will be managed by states. NHI covers the self-employed, agricultural workers, and unemployed. It mainly consists of local government plans (so at smaller regional divisions than Medicaid) but, like Medicaid, has poorer members than average, and it receives half of its funding from the national government. Finally, coverage for the elderly is merged into other plans but has special benefits and financing, similar to Medicare.40 Unlike in Japan, individuals in the US exchanges are expected to choose among many insurers, and Medicare also offers choices. Yet insurance choices do exist in other systems. Neither the pooling nor having choices is so distinctive. But the nature of the choices in the new US design is much different from other countries. The benefit packages would be much more varied and so will do little to change the factors that make US coverage both less certain and a cause of higher costs. To begin, the legislation does hardly anything to standardize benefits sponsored by employers. The costs of marketing and underwriting for insurance for more than half of Americans therefore should change little. Health care providers will still deal with a huge number of plans, with varied coverage terms and provider networks, and so face all the extra costs associated with the varied eligibility and billing. Coverage through the exchanges will also be quite varied. The legislation requires that the plans meet one of five standards for value, but within those standards, they might have quite different terms and networks. The exchange system will reduce marketing and underwriting costs for a small percentage of the market but do little to reduce administrative costs and confusion for providers and patients. Not only will benefits remain confusing, but the standard for subsidy in the exchanges provides a definition of appropriate benefits that is relatively meager. It is based on the “silver plan” that is supposed to cover, on average, 70% of the costs of an “essential” benefit package. The current norm for employer-sponsored insurance in the United States is about 84%, and even countries that ostensibly have high cost sharing have more extensive coverage.41 The design in the 2010 legislation has been further weakened by the Supreme Court, which in June of 2012, in NFIB v. Sebelius, ruled that states are not required to implement the expansions of Medicaid.42 In the short run at least, that will 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 376 PART VII • The United States in International Context allow two inequalities that will be quite unusual compared to other countries. A fairly large number of states, such as Texas, will not implement the Medicaid coverage. So insurance guarantees will be quite different depending on where you live. Moreover, in the states that do not expand Medicaid, households with incomes above the FPL may still get insurance through the exchanges, while some households with income below that level will not. The effect will be to have, in those states, a system that guarantees coverage to all but some of the very poorest citizens.43 That has no parallel among advanced industrial countries. As described earlier, the international standard includes concentration of payer power, coordinated payment rules, limits on capital investment, and relative administrative simplicity. The reform does hardly anything to increase use of these tools, though it does tighten payment restrictions within Medicare. An indirect version of the international standard was proposed and seriously debated. This was Jacob Hacker’s idea that the exchanges would give customers the option of buying public insurance based on Medicare.45 Yet this approach was rejected, and there was hardly any advocacy for extending regulatory cost controls beyond the public plan.46 In the long run, in spite of the fact that the political balance I exin significant states for the moment opposes the Medicaid pansion, there is reason to believe that political pressures G will cause almost all states to adopt it. Otherwise, states will be G foregoing hundreds of millions or billions of dollars in federal money. Their inhabitants will be paying taxes that,Sat least in theory, are paying for benefits in other states rather than , their own states. Representatives of major interests, such as hospitals, will want their states to take the federal money. The financial logic for taking the money is very strong. Therefore, S if the legislation is funded and not repealed, it will likely lead to the level of transfers and social sharing expectedH from its design. In the short run, however, the transition willAinvolve unique inequities. The reform design encourages somewhat more cost sharing than is normal in other countries, in two ways. The first is setting the silver benefit level as the standard for subsidies in the exchanges. This will make it difficult for most people to purchase more extensive benefits, while also setting an informal standard that may encourage employers to reduce the value of the plans they sponsor. The second is a provision that will force employers with particularly expensive groups of employees to reduce the coverage they sponsor. H N Thus, although the United States would have a standard I other level of transfers and would somewhat resemble a few nations’ systems to pool risk, it would remain extremely C complex, hard to navigate, and a generator of extra costs. From a Qreduce comparative perspective, the reform does much less to the difference between the United States and other countries U on spending than on coverage.44 A The cost-control nonprovisions of the legislation also maintain what is most unique about insurance provided through employment in the United States. In the United States, 1 each employer is left alone to battle the insurers and medical pro1 to viders over costs. Individual employers have little leverage get better deals, so their major spending control tool 0 in the current market is to adjust the benefit packages they sponsor. 5 the In all other systems, even if there are multiple insurers, power of payers is concentrated to somewhat constrain T costs through either government rate setting or all-payer bargaining. S and This in turn allows them to have more standard benefits so greater clarity and lower administrative costs than in the United States. This “Cadillac tax,” as its proponents called it, will charge insurers (which really means employers) 40% of the value of any coverage above a fixed dollar amount. Its advocates viewed it as a way to keep employers from offering luxury benefits that raise costs. Many American health economists, including prominent advisers to the Democrats, believe that excess insurance is a major cause of costs, and that the tax preference for health insurance is distributionally inequitable.47 In fact, however, the most common reason for plans being unusually expensive is that they insure groups that have high health expenses. So the Cadillac tax is more of an “ambulance tax.” Therefore, the major effect of the excise tax would be a sort of reverse risk adjustment: raising the costs of insuring the riskiest groups.48 It will force higher cost sharing for sicker groups of people. This is a truly unique approach to cost sharing by international standards. Its effect would be delayed and somewhat diminished, however, by both not being applied until 2018 and some adjustments for more visible risk factors such as the age distribution in a group.49 Most of the cost-control language in the reform follows a third approach, which emphasizes reorganizing medical care delivery. I call this the aspirational agenda because it is broadly promoted and endorsed in the international health-policy community but barely exists in practice. The US version of reform in 2010 included increasing the use of (or at least spending 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 23 • American Health Care in International Perspective more on) health information technology (HIT); finding ways to “pay for performance” rather than for health services (known as P4P); increasing spending on preventive care in hopes that would reduce spending on curative care; reorganizing health care delivery to create something called accountable care organizations (ACOs); doing much more cost-effectiveness analysis (CEA) to have more evidence-based medicine (EBM); creating “medical homes,” somehow replacing fee-for-service payment of physicians with something else; and various other measures (hundreds of pages of legislative text). This is not the place to explain either why these measures H were included or why they are highly unlikely to have any significant effects on costs. Suffice it to say that there isIlittle evidence that these measures would work or even, in some G cases, about how they would be implemented.50 The aspiG rational agenda measures adopted in the legislation consist largely of pilots and experiments focused on the Medicare S program. They could not have a substantial effect even on , Medicare, even if they worked, for many years and so could not have effects on the rest of the system until even later.51 Interest in the aspirational agenda is common around the world. S Actually relying on it for cost control, however, is uniquely H American. A NexThe 2010 reform, if fully implemented, will substantially pand health insurance in the United States. In terms of social I sharing, it moves the United States closer to the international C Q U A Preferences 377 standard. In terms of cost control, it does not. What preferences or politics explain this result? That is a huge question, but if we compare US politics to the politics of reform in other countries, certain developments appear most significant. The reform was enacted because partisanship has become a much more decisive factor in congressional decision making over the past few decades. The Democrats had substantial majorities and were more united (though still significantly divided) than in previous legislative battles over health care. The majority of the party was desperate not to fail again, so compromised with the minority by supporting legislation that would not cover everybody and abandoned measures such as the public plan.52 On balance, the ways in which the legislation was passed do not suggest that the politics of health in the United States has become markedly less distinctive. It is still characterized by weaker support for social solidarity, and particularly vociferous opposition. The legislation was passed without majority public support, in a purely partisan manner, by a partisan majority that lost power nearly immediately. It has already been weakened by the Supreme Court, and it could certainly be reversed if the Republicans gain full power in the future and could well be chipped away even if that does not occur. In contrast, in spite of criticisms, the national health care or insurance systems in other countries are much more established and stable. CONCLUSION Comparison to other countries does not tell anyone 1 what health policies they should desire. effectively as some alternatives, but that is mostly because of the high costs of care in the United States. However, it provides evidence about both what is possible and how specific policies will work. The review in0this chapter suggests some core conclusions: 5 The United States could have lower costs and betterTcoverage if its policies were different. The sociology of health care is fairly standard around the world. The fact that the aspirational agenda is an aspiration rather than practice everywhere is a result of this kind of factor. It also suggests that it is not likely to succeed in the United States. The reforms legislated in 2010 would, if fully implemented, improve coverage. They would not do so as efficiently or Americans have chosen, to the extent their political system represents them, not to follow the cost-control evidence 1 S 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 378 PART VII • The United States in International Context from the rest of the world. The politics of the 2010 reform gives little reason to believe that will change. However, the fact that legislation to substantially expand coverage was adopted at all means that one should not be too sure of political predictions. Study Questions 1. According to this chapter, what three kinds of information can be learned from international comparisons of health care systems? H 2. What are examples of health care system possibilities we might learn from looking at other countries? I of inferring cause-and-effect relationships from international 3. What are some cautions about and examples comparisons? G 4. What sorts of questions might arise about health care politics being common or different among countries? G 5. In the author’s opinion, will recent health care reform in the United States move us much closer to a European or S access? international model of health care coverage and , ENDNOTES S 1. For explanation of why similar levels of economic development tend to be accompanied by some convergence in H is also the source of the term rich democracies. sociology and politics, see Wilensky, 2002, which A the members of the OECD, which constitutes kind of a developed 2. The set of countries for reference begins with countries “club.” There are some countries that are rich because of oil resources, but that is not the same kind of N economic development. In 2009, 23 of the OECD member nations had per capita national incomes above $25,000 per year, with national currency translated Iinto US dollars according to purchasing power parity (World Bank, 2011). Those are the countries used in TablesC25-1 and 25-2. Some other countries that approach this income level have versions of NHI as well. My own research has focused on Australia, Canada, France, Germany, Japan, the Q Netherlands, and the United Kingdom. 3. White, 2001. 4. White, 1995; Luft, 2011. U A 5. White, 2004; Gray, 2005. Of course, having better evidence does not mean people will recognize it, and in this case, the conventional wisdom is so conventional, though wrong, that I do not expect the average American policymaker 1 or editorial writer to notice the error. 1 between the quality of care and other factors, such as access to 6. A large part of the difficulty is how to distinguish care or factors that affect underlying health risks 0 separate from medical care. Yet even measuring the quality of specific types of treatment is very challenging. One of the few examples of thorough analysis of quality of care is OECD, 5 difficulties, see chapter 3 on stroke treatment and care. 2003; for a good example of the measurement T 2003, but there is much more to be said. 7. The classic analysis of this question is Kingdon, 8. For a discussion see Leape, 2005, but a political S scientist might have a somewhat more skeptical view. 9. Stevens, 2005. 10. White, 2009a. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 23 • American Health Care in International Perspective 379 11. For a much more extensive discussion of all-payer systems see White, 2009b. 12. White, 1999. 13. Rodwin, 2011. 14. My source for this is personal experience, but everyone else with whom I talk and who has experience in both countries agrees! 15. Campbell and Ikegami, 1998. Lower fees then also encouraged the Japanese industry to develop products that would have price advantages in some markets. 16. Light, 1998; Robinson, 2005; White, 2007. H 17. Many health-policy analysts believe technology is the major cause of growth in health care spending. If this is true, I it is only true in an uninteresting way, particularly for Americans. The wide variations in spending between systems G Whether a technology is implemented and how much is paid cannot be explained by technology, which is universal. for it depends on policies. Moreover, too often invention and promotion of new services is defined as technology G when it might better be called “marketing.” S , Anderson, Hussey, Frogner, and Waters, 2005; Angrisano, 19. Anderson, Reinhardt, Hussey, and Petrosyan, 2003; 18. Gray, 2005; OECD, 2003; White, 2004. Farrell, Kocher, Laboissiere, and Parker, 2007; Ginsburg, 2008. 20. OECD, 2003, pp. 201–4. S H 22. For some good examples, see Oberlander, 2011. A 23. On average, while I lived in France in 2010–2011, the full prices for my prescriptions were only slightly more than my co-pay for the same drugs in the United States. N I 24. For a full discussion see White, 2007. 25. Jost, 2009. C 26. US relative performance on such measures has Q tended to get worse, not better, over the two decades that I have been looking at this data. The data available from White, 1995, for example, showed the United States with much better relative performance at age 65. In essence,U other countries’ performance appears to be improving more quickly than US performance, on average. This is understandable for poorer countries that are catching up economically, so A 21. For a typical example see Daniels, 2005; for a critique see Oberlander and White, 2009. have been improving social conditions and availability of medical care; it is surprising that the pattern should be so general. 1 1 28. Anderson et al., 2005. 29. Orthopedic surgeons may have developed interest 0 in the work from experience with sports, the realm in which broken bones are most common for young people. It at least used to help if one was large and strong enough to manipulate bodies and bones. They hope not to 5 have long-term relationships with patients. When bones are already broken, there is a limit on the opportunities to beTgentle. Pediatricians are dealing with frightened children, often in the presence of a parent who would expect gentleness, expect long-term relationships, and so on. It would be interS esting to observe how this informal sociology holds true as a larger part of orthopedic surgeons’ practice consists of 27. Nolte and McKee, 2008, quote on p. 58. frail and elderly people getting hips and knees replaced. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 380 PART VII • The United States in International Context 30. Reinhardt, 1996. 31. Readers may consult http://academyhealth.org for examples of this advocacy; for a more international example see OECD, 2003. 32. White 1998, 2010. 33. Payer, 1996. 34. Glaser, 1994. 35. This is a major theme in the comparative public policy literature; for just one example see Wilensky, 2002. The first major step toward national health insuranceHwas taken by Germany in 1881, led by the distinctly nonsocialistic chancellor Otto von Bismarck. I 36. This account was written to put the enacted reforms into perspective. For that purpose, the question of whether they will be implemented can be ignored. If G this is read while the battle over implementation continues, perhaps it will inform some readers’ understandings of G the stakes. 37. As must be reported elsewhere in this volume, the reform required two laws, the Patient Protection and Affordable S Care Act and amendments in a reconciliation law. Therefore, I will refer to it not as the PPACA but as “the legislation” or “the reform.” For good summaries of,the combined terms, see Commonwealth Fund, 2010, and Kaiser Family Foundation, 2010. 38. The population figures are my calculations from US Census Bureau, 2010. Estimates presume that many people with incomes that qualify for subsidies will,S instead, receive their insurance through their employers. But that too has indirect support, through the tax code; H and in any case the potential commitment is the best measure of the legislation. A N 40. Fukuwa, 2002; Matsuda, 2009. I 41. The definition of essential benefits was left to the secretary of health and human services to develop. Leaving aside the question of why one would cover less than C the essential, the Commonwealth Fund estimated a plausible package to come up with the 84% figure (Davis, 2010). The French system has high cost sharing for many services (e.g., Q 35% for most drugs), but it excludes over 30 expensive conditions from cost sharing and as a result covers far more than 70% of costs, even before one accountsU for the fact that over 90% of the population has voluntary supplementary insurance. A 39. Author’s calculation from data in OECD, 2010. 42. Rosenbaum, 2012. 43. Children and their mothers with the lowest incomes were in all states previously eligible for Medicaid, but single persons or couples without children generally1were not. 1 45. Advocates for this “public plan” wanted it to 0 pay providers at Medicare rates (or slightly higher) and to strongly encourage providers to contract with the public plan by requiring them to do so if they wanted to serve Medicare 5 patients. Thus it would further concentrate the payer power that already is greater for Medicare than for private insurers. Private insurers would have had to T find better ways to control costs, since they would now be competing not only with each other but with the public plan as well. They would either succeed or lose more market share— S strengthening the public plan further. See Hacker, 2009; Holahan, 2009. 44. Oberlander, 2011. 46. A not at all prominent exception is White, 2009b. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 23 • American Health Care in International Perspective 381 47. For strong statements of these beliefs see Rampell, 2009; and Gruber, 2009. 48. Jost and White, 2010. 49. See Van de Water, 2010. One should expect, however, that employers who expect their coverage to be subject to the tax would begin scaling down before 2018 rather than making the change in one big chunk that year. 50. For critiques see Alliance for Health Reform, 2008; Marmor, Oberlander, and White, 2009; Pauly, 2008; and, most importantly and thoroughly, Congressional Budget Office, 2008. 51. See the estimates for Medicare Title III, Subtitle A, in CBO, 2010. 52. See Brown, 2011; Cohn, 2010; Hacker, 2010; forH a summary of the reasons conflicted Democrats supported any bill at all, see White, 2011. I G REFERENCES G Alliance for Health Reform. 2008 (June 3). “Putting the Brakes on Health Care Costs: Would the Candidates’ Plans Work? 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Gruber, J. 2009. “Cadillac Tax Isn’t a Tax: It’s a Plan to Finance Real Health Care Reform.” Washington Post, December 28. H Retrieved from http://www.washingtonpost.com/wp-dyn/content/article/2009/12/27/AR2009122701714.html. Hacker, J. 2009. “Healthy Competition—The WhyI and How of ‘Public Plan Choice’.” New England Journal of Medicine 360(22): 2269–71. G ———. 2010. “The Road to Somewhere: Why Health G Reform Happened.” Perspectives on Politics 8(3): 861–76. Holahan, J. 2009. Statement to Committee on Ways and Means, United States House of Representatives, Hearing on S “Health Reform in the 21st Century: Proposals to Reform the Health System.” Retrieved from http://www.urban .org/UploadedPDF/901265_JHolahanCongTestimonyJune242009.pdf. , Jost, T. S. 2009. “The Experience of Switzerland and the Netherlands with Individual Health Insurance Mandates: A Model for the United States?” Retrieved from http://law.wlu.edu/deptimages/Faculty/Jost%20The%20 S Experience%20of%20Switzerland%20and%20the%20Netherlands.pdf. H Health Care Spending: What is the Cost of an Excise Tax that Jost, T. S. and J. White. 2010 (January 13). “Cutting Keeps People from Going to the Doctor?” Institute A for America’s Future. Retrieved from http://www.ourfuture.org/ files/Jost-White_Excise_Tax.pdf. N Kaiser Family Foundation. 2010. “% Focus on Health Reform: Summary of the New Health Reform Law.” Retrieved I from http://kff.org/healthreform/upload/8061.pdf. Kingdon, J. 2003. Agendas, Alternatives, and Public C Policies (2nd Ed.). New York: Longman. Leape, L. 2005. “Preventing Medical Errors.” In D.Q Mechanic, L. B. Rogut, and D. C. Colby, eds., Policy Challenges in Modern Health Care (pp. 162–76). New Brunswick, NJ: Rutgers University Press. U A Luft, H. S. 2011. “Health Reform: Avoiding the Backlash.” Journal of Health Politics, Policy and Law 36(3): 485–90. Light, D. 1998. Effective Commissioning. London: Office of Health Economics. Marmor, T. R., J. Oberlander, and J. White. 2009. “The Obama Administration’s Options for Health Care Cost Control: Hope vs. Reality.” Annals of Internal Medicine 1 150(7): 485–89. Matsuda, R. 2009. “A New Rule for Setting Premium 1 Rates.” Health Policy Monitor. Retrieved from http://hpm.org/en/ Surveys/Ritsumeikan_University_-_Japan/13/A_New_Rule_for_Setting_Premium_Rates.html on July 11, 2013. 0 Nolte, E., and C. M. McKee. 2008. “Measuring the Health of Nations: Updating an Earlier Analysis.” Health Affairs 5 27(1): 58–71. Oberlander, J. 2011. “Throwing Darts: Americans’T Elusive Search for Health Care Cost Control.” Journal of Health Politics, Policy and Law 36(3): 477–84. S Oberlander, J., and J. White. 2009. “Public Attitudes toward Health Care Spending Aren’t the Problem: Prices Are.” Health Affairs 28(5): 1285–93. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 23 • American Health Care in International Perspective 383 Organisation for Economic Co-Operation and Development (OECD). 2003. A Disease-Based Comparison of Health Systems: What Is Best and at What Cost? Paris: OECD. ———. 2010. Health Data/Eco-Sante (database). Pauly, M. V. 2008 (September 16). “Blending Better Ingredients for Health Care Reform.” Health Affairs 27(6): W482–91. Payer, L. 1996. Medicine & Culture: Varieties of Treatments in the United States, England, West Germany, and France. New York: Henry Holt and Company. Rampell, C. 2009. “Economists’ Letter to Obama on Health Care Reform.” New York Times, November 17, Economix H [Blog]. Retrieved from http://economix.blogs.nytimes.com/2009/11/17/economists-letter-to-obama-on-health-carereform. I Reinhardt, U. 1996. “Perspective: Our Obsessive Quest Gto Gut the Hospital.” Health Affairs 15(2): 145–54. Robinson, J. C. 2005. “Entrepreneurial Challenges to Integrated Care.” In D. Mechanic, L. B. Rogut, and D. C. Colby, G eds., Policy Challenges in Modern Health Care (pp. 53–68). New Brunswick, NJ: Rutgers University Press. S Rodwin, M. A. 2011. Conflicts of Interest and the Future of Medicine: The United States, France and Japan. New York: Oxford University Press. , Rosenbaum, S. 2012 (June 28). “The Supreme Court’s Medicaid Ruling: A Shift in Kind, Not Merely Degree.” Health Affairs Blog. Retrieved from http://healthaffairs.org/blog/2012/06/28/the-supreme-courts-medicaid-ruling-a-shift-inS kind-not-merely-degree/ on July 2, 2013. H and the Quality of Health Care.” In D. Mechanic, L. B. Stevens, R. 2005. “Specialization, Specialty Organizations, Rogut, and D. C. Colby, eds., Policy Challenges in AModern Health Care (pp. 206–20). New Brunswick, NJ: Rutgers University Press. N U.S. Census Bureau. 2010. “Income, Poverty and Health Insurance in the United States 2010.” Retrieved from http:// I www.census.gov/hhes/www/poverty/data/incpovhlth/2010/index.html on July 11, 2013. Van de Water, P. 2010 (January 26). “Changes to Excise C Tax on High-Cost Health Plans Address Criticisms, Retain LongTerm Benefits.” Center on Budget and Policy Priorities. Retrieved from http://www.cbpp.org/cms/?fa=view&id=3060. Q White, J. 1995. Competing Solutions: American Health Care Proposals and International Experience. Washington, DC: U The Brookings Institution. A In T. R. Marmor and P. R. DeJong, eds., Ageing, Social ———. 1998. “Health Care Reform: What Is the Problem?” Security and Affordability (pp. 246–70). Aldershot, UK: Ashgate. ———. 1999. “Targets and Systems of Health Care Cost Control.” Journal of Health Politics, Policy and Law 24(4): 1 653–96. 1 In N. J. Smelser, and P. B. Baltes, eds., International ———. 2001. “National Health Care/Insurance Systems.” Encyclopedia of the Social and Behavioral Sciences 0 (pp. 10301–05). New York: Elsevier. ———. 2004. “(How) Is Aging a Health Policy Problem?” 5 Yale Journal of Health Policy, Law and Ethics, 4(1): 47–68. ———. 2007. “Markets and Medical Care: The United TStates, 1993–2005.” The Milbank Quarterly 85(3): 395–448. ———. 2009a. “Gap and Parallel Insurance in Health Care Systems with Mandatory Contributions to a Single Funding S Pool for Core Medical and Hospital Benefits for All Citizens in Any Given Geographic Area.” Journal of Health Politics, Policy and Law 34(4): 543–83. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 384 PART VII • The United States in International Context ———. 2009b (May). “Cost Control and Health Care Reform: The Case for All-Payer Regulation.” Health care reform discussion paper, posted to the Campaign for America’s Future Web site. Retrieved from http://www.ourfuture.org/ files/JWhiteAllPayerCostControl.pdf. ———. 2010. “Cost of Healthcare in Western Countries.” In D. A. Warrell, T. M. Cox, and J. D. Firth, eds., Oxford Textbook of Medicine (5th Ed., Vol. 1, pp. 112–16). Oxford: Oxford University Press. ———. 2011. “Muddling Through the Muddled Middle” Journal of Health Politics, Policy, and Law, 36(3): 443–48. Wilensky, H. 2002. Rich Democracies: Political Economy, Public Policy, and Performance. Berkeley: University of California Press. H 2009, Atlas Method and PPP.” Table from World Development World Bank. 2011. “Gross National Income Per Capita Indicators Database. Retrieved from http://siteresources.worldbank.org/DATASTATISTICS/Resources/GNIPC.pdf. I G G S , S H A N I C Q U A 1 1 0 5 T S 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. Chapter 24 England Daniel C. Ehlke H I G G S , This chapter examines the rise of the British National Health Service. It explains how British health reformers turned to market competition and S placed it in the middle of a government-run system. Finally, the chapter H compares the idea of market competition in health care as it has played out A in Britain and in the United States. N I C Health care challenges every effort to introduce free market forces, but as costs keep rising, policymakers aroundQthe world keep trying. This chapter looks at British efforts to Uinject market forces into their national health service. Americans A might feel a bit dizzy when they first encounter the British experience. After all, we often imagine that markets are the opposite of government; while many chapters in this book 1 it. challenge that idea, the English case completely explodes In Britain, market reforms operate entirely within the central1 ized, government-run, British National Health Service (NHS). 0 Indeed the reforms are known as “internal markets”—internal to a vast, bureaucratic, public-health service. 5 While injecting markets into a governmental programTmay sound unusual to American ears, in many ways, the British results parallel our own reform experience: The British S internal market was intended to alter the power relations within the medical profession, transform the relations between payer and provider, and empower consumers, while delivering greater “value for money.” As in the American case, results have been mixed—the only constant in recent years has been change. British Health Care Before 1948: Antecedents of the NHS By the end of the 19th century, two kinds of hospitals had developed in Britain. Wealthier people received care at the so-called voluntary hospitals.1 These were private institutions financed by members of the nobility and others who could afford to cover the costs of such institutions.2 Municipal hospitals treated the poor and, to some extent, the middle classes. Overseen and funded by local governments, municipal hospitals varied widely in quality, reflecting the uneven distribution 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 386 PART VII • The United States in International Context of wealth among the different communities. Care of any quality was often hard to come by in rural areas, which suffered from a shortage of medical professionals and facilities.3 insurance system and would continue to operate independent of significant government intervention for nearly another three decades. Physician services were also divided into two categories. As in many nations, the British drew a sharp distinction between office-based general practitioners (GPs) and hospital-based specialists. A rivalry soon developed between the GPs and the hospital specialists. For the most part, the latter enjoyed greater prestige, viewing GPs and their patients as being beholden to them. 4 Government programs would perpetuate this bifurcation among British H medical professionals. The interwar period would feature a lengthy debate concerning ways to improve British health care generally, and the proper role of the government in health care. By the 1920s and 1930s, the British health care system was in a state of crisis. During the Great Depression, many hospitals, municipal and voluntary alike, were underfunded, with some forced to close. Voluntary hospitals increasingly found themselves in the unfamiliar position of actually lagging in quality behind many municipal hospitals.9 This trend accelerated once legislation allowed local authorities to take over the ancient poor-law medical institutions, thereby encouraging local government to construct a more unified system of health care provision. Voluntary hospitals soon followed suit, banding together to centralize care under their collective auspices. By the 1930s, the hospital sector was marked by ever-greater centralization of operations.10 I The state established a role in medicine by 1911 with the passage of national health insurance for workers. G The Liberal Party under the leadership of Prime Minister David G Lloyd George championed the legislation. Lloyd George, who beS War I, came best known for guiding the nation through World was a legendary political survivor, changing positions , frequently across a range of issues to preserve his position at or near the apex of the national power structure.5 Though a decidedly dynamic figure himself, he led a Liberal Party S that was even then heading into a state of long-term decline. AlH ready competing with a fledgling Labour Party for votes, Lloyd George hit upon the construction of a limited welfareAstate as a means of improving the fortunes of the laboring class and, N with it, those of his own party.6 I Liberal The national health insurance established by the government in 1911 was quite narrow. Under the plan, C the government financed a portion of basic health care costs with Q employers and, to a far lesser extent, the workers themselves paying the rest. Dependents of workers were not U covered. Nor were hospital costs.7 The legislation was partly inspired A by the German health care system, in which the provision and finance of health care was (and is) closely related to employment sectors; the Germans also limited coverage 1 to the “workingmen” within society. 1 This early experiment with national health insurance estab0 state. lished a working relationship between the GPs and the Initially the GPs feared state intervention in the affairs of the 5 profession, and physicians represented by the British Medical T to Association (BMA) opposed the plan.8 After threatening refuse to provide care under national health insurance, S most physicians chose to participate in the new scheme and quickly grew fond of the steady flow of income it provided. Hospitalbased physicians remained excluded from the national health The partial and haphazard centralization did not solve the problems of the health care system. Inequities developed, particularly between rural and urban areas. Poor conditions and low quality of care marked hospitals serving every class. By the late 1930s, there was a growing consensus that something had to be done to improve the state of British health care. There was little agreement, however, as to just what might constitute the proper prescription. As World War II descended on continental Europe and threatened the British Isles, government officials prepared for the possibility of massive military and civilian casualties by enlisting a large proportion of the medical community in the service of the state. The GPs extended their tradition of cooperation with the state, and now that tradition expanded as hospital-based specialists were enlisted into this Emergency Medical Service.11 This system had its share of weaknesses and hiccups, particularly in its early phases. Many physicians were forced to abandon lucrative practices to provide care where the state-expected need could be greatest, with significant reductions in revenue the result. These kinks were, in good measure, ironed out once government and medical personnel agreed on a fair (and, in some cases, generous) rate of compensation. Like GPs before them, many hospital-based physicians learned to work with public officials. Ironically, the Emergency Medical Service would prove largely unnecessary. Though a 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 24 • England fair swath of England, and London particularly, suffered under the depredations of Hitler’s Luftwaffe, resultant casualties were far lower than the government had predicted in the immediate run-up to war. The episode was nonetheless significant within the context of the state’s role in the national health care system. Along with the National Health Insurance Act of 1911, the Emergency Medical Service of the late 1930s and early 1940s set a precedent of substantial government intervention in British health care. Indeed, the effectiveness of the service led to calls for a postwar National Health Service, one which the government swiftly promised its citizenry.12 H In addition to providing hospital-based physicians with experience in working with government, World War II alsoI had broader significance for the development of the British health G care system. England had been a heavily stratified society. G Now, groups who had been thoroughly segregated from one another found themselves thrown together under considerS able adversity. The same fears of widespread (mainly urban) , casualties that led the government to establish the Emergency Medical Service also led to mass evacuations of women and children from London and other urban centers, into (an S often more genteel) countryside. Well-off rural residents were, for H the first time, brought into contact with some of the poorest within society.13 A For the most part, this experience and the shared common N peril of daily (and nightly) bombing raids had the effect of blurI to ring class boundaries. The national solidarity contributed postwar acceptance of measures aimed at the further leveling C of British society. This spirit found voice in the work of social Q reformer and sometime government advisor William Beveridge. At the request of Labour leaders in the wartime coalition U government, Beveridge prepared a report in which he outlined A measures for improving the well-being of the British populace after the war. Unveiled at the height of World War II in November 1942, his report was a tour de force, enlisting govern1 ment to put its authority to bear in slaying what he called the 1 14 “five giants”: illness, ignorance, disease, squalor, and want. The report created national excitement. A Gallup poll0carried out in 1943 discovered that 95% of the public had heard about the report and overwhelmingly supported its three5major goals: a health service, a children’s program, and aTfullemployment plan.15 S In the area of health care, many (though certainly not all) of Beveridge’s recommendations would be swept into law by a very rare political event: “a landslide upset.” Winston 387 Churchill’s conservatives, anxious about “the follies of socialism,” called for “pragmatic reform.” Labour, which more enthusiastically embraced the popular Beveridge report, won its first majority in the House of Commons by a stunning 146 seat margin. Labour’s Minister of Health, Aneurin Bevan, touted Beveridge’s vision, beginning with the establishment in 1948 of the NHS.16 The NHS Success Story As we have seen, the period from approximately 1911 to 1941 had witnessed two trends in the field of British medical organization: An ever-increasing proportion of the medical community was brought into contact with the state, and the hospital sector underwent considerable centralization, with many previously stand-alone facilities combining with other facilities. Though the system remained rather haphazard, power increasingly resided in three sectors: medical professionals, local authorities, and the national government. By 1945, many could agree on the need for a unified health service. What remained open to (fierce) debate was just how such a system would look and—more specifically—who would hold the reins of power. Local authorities initially appeared the best candidates to lead the health service. Their role in the hospital sector had, after all, been steadily increasing prior to the war, and such an approach would be a good bit less politically ambitious than outright nationalization of health care.17 In the end, however, Aneurin Bevan settled on nationalization. Under Bevan’s NHS, all hospitals would be state run. Bevan divided England and Wales into a total of 14 health service regions, each focused around a prominent teaching hospital. To avoid a London-centered region from lording over (and draining resources from) outlying districts, Bevan drew regional boundaries that met in a point within the city. This way the various neighborhoods of the capital would be divided into four regions, preventing the rise of a preponderantly powerful London-based bloc. Operations within health regions were to be overseen by a new administrative construct: the Regional Health Board (RHB). RHB members were appointed by Bevan himself though, insofar as possible, the government worked to keep leaders within health care’s ancien regime in positions of power. Their responsibilities were broad and included capital planning and the formation of hospital maintenance 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. 388 PART VII • The United States in International Context c­ ommittees (HMCs). These latter committees would form a unified control structure of the diverse hospital facilities to be found within the various regions—effectively turning a number of different institutions into a single organism.18 At least that was how it was to work in theory—in practice, there was a large loophole in the form of teaching hospitals. Though the health regions had been partly determined on the basis of their geographical distribution across the country, teaching hospitals were only brought into the fledgling NHS on the condition that they would retain a considerable degree of independence. Though a representative from H their respective RHBs was added to the governing boards of these I the institutions, they largely retained freedom of action under 19 new system. G Anticipating and, indeed, encountering resistance G from organized medicine, Bevan ensured that the system incorpoS rated key compromises to the important groups comprising the medical community. When it came to physician ,compensation, for instance, GPs were to receive capitation (i.e., set fees per patient examined) rather than an outright state salary, thus preserving their nominal independence from S state control. Similarly, specialists were granted the privilege of reH taining private practices and seeing (private) patients in NHS facilities. Ironically, specialists accepted the very state A salary scheme opposed by GPs. N Even after these significant compromises were struck, proI fessional opposition remained and the BMA threatened a 20 strike. At the very last minute, however, the BMA Cleadership recommended its members accept and serve the new Q regime. Parliament passed the law in November 1946, a little more than a year after the unexpected rise to power ofUAttlee’s Labour government. The NHS went into effect on July 5, 1948. A Beveridge and his allies had, from the start, envisioned an NHS that would improve the well-being of society, while actually lowering health care costs. In the event (and perhaps 1 unsurprisingly), this did not occur. Indeed, NHS resource needs 1 were consistently underestimated by Attlee’s government.21 0 early While absolute costs rose considerably, much of these increases could be chalked up to inflation; as a proportion of 5 gross domestic product (GDP), health care spending remained T 3 to stable, and at a decidedly low level—rising from roughly 4% of GDP over the next 15 years.22 S Despite the relatively low investment required to maintain the NHS, the service would continue to face cost-cutting pressures from the Treasury ministry, or Exchequer. The initial cost overruns shifted the power over the NHS from the Health Ministry (the political guardian of the NHS) to the budget hawks at the chancellor of the Exchequer. From very early on, Treasury officials dominated the NHS, constantly laboring to control health spending, at one point establishing a maximum level of government investment.23 For this and numerous other reasons, health expenditure would remain very low throughout the postwar period, particularly relative to that of the United States (see Figure 24-1). The NHS was, from the start, a hugely popular program. Large proportions of the British populace have expressed and, continue to express support for the NHS. Indeed, a 2002 poll showed a full 80% of citizens surveyed to believe the NHS was critical to British society.24 Ironically, the very popularity of the NHS leads politicians to portray the NHS as being endangered and vulnerable to the whims of the government of the day. The party in opposition, Conservative and Labour alike, often finds health policy a convenient means by which to focus criticism on the government. That this has proven a consistent theme in British politics is, in turn, the result of health care having been thoroughly politicized. This is not to say that health care somehow falls outside the realm of politics in the United States. However, the British system is very much a command-andcontrol entity—the government is responsible for the smooth operation of the health care system—and the opposition always seeks to score political points by blasting the stewardship of the party in power. 20 15 10 5 0 1960 1970 1980 1990 United States 2000 2005 2009 Britain Figure 24-1 National Health Expenditures, 1960–2009, United States and United Kingdom Source: Centers for Disease Control and Prevention, “Health, United States, 2011.” Retrieved from http://www.cdc.gov/ nchs/hus/healthexpenditures.htm. 9781305172005, Health Politics and Policy, Fifth Edition, Morone/Ehlke - © Cengage Learning. All rights reserved. No distribution allowed without express authorization. CHAPTER 24 • England The historical circumstances surrounding the establishment of the NHS also ensure that it remains central to British political conflict. Having served generations of citizens over nearly six decades, the NHS stands as one of the crown jewels of Labour’s postwar political legacy. Since it had been skeptical about the organization up to the moment of its passage, the Conservative Party has spent decades proving its worth as a custodian—even enhancer—of the service. In more recent years, the Conservatives (or Tories) have presented themselves as a big-tent party, genuinely concerned with the well-being of all citizens, particularly the most vulnerable. In H Britain, health policy has been central to this effort at party I transformation. faith in the efficacy (and, indeed, good intentions) of political leaders and governing institutions, the British underwent a period when their nation also seemed ungovernable. The NHS forged an alliance among three groups: the GPs,Sspecialists in the hospitals, and local government. The three H acted with considerable independence within the NHS structure. By A the late 1960s, policymakers, academics, and some (though by no means all) elements within the medical professionN were pushing for management and structural reform aimed at unifyI ing the three components of health care delivery.25 The roots of this political crisis lay in an economic malaise that spread across much ...
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